This chart explains how the Baltic Dry Index could spell doom for the global economy

Shipping is a good indicator of how the global economy's doing
REUTERS/Svitzer/Handout
Even if you follow markets and global economics news, you still may not know what the Baltic Dry Index (BDI) is and why it matters.

You might guess it's related to shipping - and you'd be right.

The BDI is a very useful gauge of global trade, and tells you how much it costs to move goods around the world in massive ships. These goods can be pretty much anything: iron ore, grain, coal ... stuff the world needs to build things and function.

As such, analysts keen to predict how the health and future of the global economy like to pay close attention to it.

In fact this is the worst it's ever been. To put it in perspective, it was at 11,000 points in May 2008, just before the financial crash. Now, it's below 300.

This matters because BDI drops have historically predicted economic crashes. It did in 2008 and it did again last November when commodity and oil prices jumped off a cliff.

As usual, most people are blaming this on China. Two years ago, the country shipped in over half the world's iron-ore and 25% of its coal. But China grew by only 7.4% last year when previously it was running at well over 10%.